In today’s briefing:
- Tencent Meituan Dividend – The US$17bn Overhang Is Here – Not All Shares in CCASS, Here We Go Again!
- Nikkei 225 Index Rebalance: Passives Trade on Friday
- Toyo Construction (1890) Plays Offence – A New Mid-Term Mgmt Plan with High Shareholder Payout
- Weekly Deals Digest (26 Mar) – Toshiba, Toyo, Healius, Mincor, Rakuten Bank, SBI Sumishin, Harita
- Merger Arb Mondays (27 Mar) – AAG Energy, Jiangnan, Toshiba, Toyo, Estia, Mincor, Golden Energy
Tencent Meituan Dividend – The US$17bn Overhang Is Here – Not All Shares in CCASS, Here We Go Again!
- On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
- At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn
- We have covered the background of the event in our previous notes. In this note, we talk about the recent updates.
Nikkei 225 Index Rebalance: Passives Trade on Friday
- Oriental Land (4661 JP), Renesas Electronics (6723 JP), Japan Airlines (9201 JP) will replace Toyobo (3101 JP), Nippon Light Metal (5703 JP), Toho Zinc (5707 JP) in the Nikkei 225.
- Estimated one-way turnover at the rebalance is 1.08% and will result in a round-trip trade of JPY 412.8bn (US$3.16bn) at the close on 31 March.
- There has been recent pre-positioning on the stocks as well as movement in short interest over the last couple of months.
Toyo Construction (1890) Plays Offence – A New Mid-Term Mgmt Plan with High Shareholder Payout
- YFO continues its fight on Board governance. Toyo Construction has shifted so the Board and a Special Committee will now examine the input Toyo says YFO has not provided.
- Toyo also objected because it said YFO’s bid could not be sustained based on Toyo’s economics. Toyo’s fight should have been offence. With a new Medium-Term Management Plan, it is.
- Toyo now promises strong revenue and double digit OP growth, and a ¥50/share (5.3%) dividend. Toyo is trying to pay off shareholders to support it against YFO. That’s fair/good.
Weekly Deals Digest (26 Mar) – Toshiba, Toyo, Healius, Mincor, Rakuten Bank, SBI Sumishin, Harita
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Rakuten Bank (5838 JP), SBI Sumishin Net Bank (7163 JP), Trial Holdings (5882 JP) and PT Trimegah Bangun Persada Tbk (Harita Nickel) (2230010D IJ) IPOs.
- Event-Driven developments – Toshiba Corp (6502 JP), Toyo Construction (1890 JP), Golden Energy & Resources (GER SP), Estia Health (EHE AU), Healius (HLS AU), Mincor Resources NL (MCR AU).
Merger Arb Mondays (27 Mar) – AAG Energy, Jiangnan, Toshiba, Toyo, Estia, Mincor, Golden Energy
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – Alliance Aviation Services (AQZ AU), 111 Inc (YI US), Genesis Minerals (GMD AU), Aag Energy Holdings (2686 HK), Tyro Payments (TYR AU), Estia Health (EHE AU).
- Lowest spreads – Mincor Resources NL (MCR AU), Healius (HLS AU), Golden Energy & Resources (GER SP), Boustead Projects (BOCJ SP), GK Goh Holdings (GKG SP), Nippon Steel.
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